Oil market sags on Saudi comments

Oil prices weakened Tuesday after a senior Saudi official signalled that the world’s top crude exporter has no intention of cutting output despite a global supply glut, analysts said.

US benchmark West Texas Intermediate for June delivery fell 18 cents to $56.81 a barrel compared with Wednesday’s closing level.

Brent North Sea crude for June declined 15 cents to stand at $64.68 a barrel in midday deals in London.

“Saudi Arabia is interested in maintaining its share in the market and interested in keeping its customers,” said Prince Abdulaziz bin Salman, the deputy oil minister, according to Bloomberg News.

“We will supply any demand for Saudi oil, as we are interested in the stability of the market.

“Saudi Arabia responds to demand in the market… we will provide oil to whoever asks for it.”

Singapore’s United Overseas Bank said Prince Abdulaziz’s comments were putting pressure on oil prices.

Saudi Arabia, the top producer in the Organization of Petroleum Exporting Countries (OPEC), pumped 10.1 million barrels a day in March, according to the Paris-based International Energy Agency.

The kingdom, OPEC’s de facto leader, has so far resisted calls for an output reduction to alleviate a global supply glut, moving instead to slash prices on crude exports to maintain market share.

Prices are also under pressure owing to bearish expectations for Wednesday’s weekly inventory report from the US Department of Energy.

The country’s historically high stockpiles are estimated to have increased by 2.5 million barrels in the week ended April 17, according to a Bloomberg News survey of experts.

Oil prices have shed about half their value since last June as global supplies of the commodity, boosted by strong production in the United States and the OPEC cartel, outpace demand.